I still get the crazy dance occasionally in the patched game... usually near a tree line, a wall, or the horse, when I try to pick something up. Walking closer usually takes care of it, and I don't recall how much it used to affect me before the patch.
As for inventory, I also suffer from pack rat syndrome (where is he, anyway?). Finishing up Skull Castle was very challenging because my inventory was just about full.
The only better answer I can give is that once you get the travel spells (portal, teleport, call home), it becomes much easier to schlepp everything back to town.
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*B*
Save Early, Save Often Save Before, Save After
Two-Star General, Spelling Soldiers
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Give 'em a hug one more time. It might be the last.
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